China Carrier Hopes to Offer iPhone 4, iPad

The iPhone 4 is certain to appear on China’s gray market soon, now that Apple has launched sales of the phone in the U.S. and several other countries. The phones will sit on store shelves beside iPads that have also been carried into the country and resold there since the Apple tablet launched outside China.

Bloomberg News

The latest version of the iPhone

So mobile carrier China Unicom will start behind the curve even if it can reach a deal to start selling the iPhone 4 and the iPad in China. Unicom is in talks with Apple about offering both devices, a person familiar with the situation said Thursday. Apple has not revealed plans to sell either the iPhone 4 or the iPad in China.

The gray market was also a problem late last year for Unicom when it became the first Chinese carrier to offer iPhones – the iPhone 3G and iPhone 3GS. Sales got off to a slow start. Current iPhones from Unicom come without Wi-Fi wireless Internet capability, due to government regulations that were in effect as the carrier prepared to launch the phones. The missing Wi-Fi made the phones less attractive than fully functional iPhones brought into China from abroad.

It is not clear if any deal would allow Unicom to offer the iPhone 4 with Wi-Fi, although an approval notice for an Apple handset with Wi-Fi recently appeared on the website of one Chinese government testing body.

Even if Unicom can deliver an iPhone 4 with Wi-Fi, sales could still suffer from the high upfront payments that Unicom charges to iPhone buyers. Marvin Lo, an analyst at Daiwa Capital Markets, reckons Unicom would have to cut those payments by half, from their current starting level of more than $730, to see “massive” iPhone sales.

Unicom said about six weeks after it launched the iPhone last year that it had sold 100,000 units. By comparison, Apple sold 270,000 iPhones in the 30 hours after its first model went on sale in the U.S. in 2007.

And the iPad? “That one will be even tougher,” says Lo. “iPad will face tougher competition than iPhone, because it’s not that elite compared to” other tablet computers that could launch in China soon.

At least one other major Western computer maker, Dell, hopes to launch a tablet computer in China, though Dell has not given any timetable for the possible introduction its 5-inch Streak device.